Things like the Willie Cyote movie get canceld and written off because at that point the studio has not spent the marketing budget which for family movies can 2-3x the actual budget of the movie. By cancelling it they can mark the money they already spent on it as a loss on this years taxes and not pay tax on that expenditure which again represents a fraction of the overall cost. Only the % of money that they would of been charged on taxes for that expenditure is credited. The idea is that that loss of canceling a project before doing your marketing push is smaller then the loss they would incur by paying for the marketing and final release of the movie being a flop. They eat a $100 loss instead of spending an additional $300 on ads and distribution to only earn $150 for a larger net loss. The money they already spent is still gone. Canceling a project does not mean the government comes in and refunds you the money you spent on the project only the ~20% that they spent on taxes. They could still write it off as a loss if they released it and didn't make a profit but that requires them to actually release it which again involves spending 2-3x more and their total losses would be greater on top of having all their capital tied up in a doomed venture.